As the electricity and water from Turkey begins to flow to Northern Cyprus, the cost of these sources will drop and promoting the competitiveness in all sectors of the Turkish part of the island, said Sunat Atun, Northern Cypriot Economy and Energy Minister.

Turkey, the protector and the main financial supporter of the northern part, has begun construction of a pipeline under the Mediterranean Sea to supply water to Northern Cyprus which is also projected to be used for transferring Turkish electricity to island.

The project is expected to soothe northern Cyprus’s fundamental and chronic problems of water shortage and expensive electricity.

The price of electricity in northern Cyprus is around double that in Turkey, as while the electricity price in Turkey is around 24 kuruş kw/h (13 cent kw/h), it reaches 50 kuruş kw/h in the northern part of the island.

Speaking at the Turkish Republic of Northern Cyprus Chamber of Industry general assembly yesterday, the Cypriot minister said that the procurement of electricity from Turkey would bring the costs down considerably.

Currently, there are four electricity fares applied in Turkish Cyprus but as the Turkish electricity came in, there would be only one fare, Atun said.

The pipeline will provide 75 million cubic meters of water per year to Turkish Cyprus from southern Turkey, while the cost of the project is expected to reach around 1 billion Turkish Liras ($550 million).

The four-phase project kicked off with the groundbreaking construction of the Anamur Alaköprü Dam in the southern province of Mersin, which is directly across from Cyprus on the Mediterranean coast. Liquidity need

In his remarks, Atun noted that the projects of transferring water and electricity from Turkey were “steps taken as part of the vision of reducing the input costs for industrial sectors” which “is not a slogan, but is a vision.”

Along with the ambitious water and electricity supply projects with Turkey, the Cypriot government’s incentives for the industry, tourism and agriculture sectors would continue as they were, the minister said.

The shortage of cash underlies the northern part of the island’s accelerated efforts to reduce costs and boost its industry as it eyes to increase its exports to cover its imports by backing local production.

“The country need exports not politics,” Atun said. “The rate of exports to imports is better than compared to five years ago but it’s true that there is still a cash problem in the country and we try to pump cash into markets.”

He warned against expensive luxury goods consumption which he says “causes money to flow abroad in abundance.” He said foreign exchanges should be raised to overcome this issue.

He also slammed the European Union during his speech and said delaying regulation which would permit direct trade between Turkish Cyprus and the European Union was the union’s shame. The EU’S open-secret protective policies’ results should be read carefully and lessons should be extracted, he added.